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June 10, 2002

Establishing a foothold in the nascent but promising Web services market, Novell will pay $212 million cash for SilverStream Software.

"We promised we'd move aggressively into the Web services space," said Jack Messman, Novell CEO. "With the acquisition of SilverStream, we will have not only achieved that goal, we will have jumped ahead of the competition."

Broadly defined, Web services technology allows different applications from different sources to communicate with each other without time-consuming custom coding. And because all communication is in XML, Web services are not tied to any one operating system or programming language.

For example, Java can talk with Perl, Windows applications can talk with UNIX applications.

Among others, Microsoft, IBM and Sun Microsystems all have Web services initiatives.

David Litwack, SilverStream president and CEO, and other shareholders will vote their shares, representing approximately 20 percent of the company, in favor of the deal. Pending regulatory and shareholder approval, the transaction should close next month.

Post-merger, SilverStream's eXtend product line will be re-branded under the Novell name. Litwack will become a senior vice president of Provo, Utah-based Novell and SilverStream's offices will remain in Billerica, Mass.

The sale comes only four months after SilverStream laid off 120 in a restructuring and plotted a course to transition from a application server vendor to Web services specialist.

Novell's purchase of SilverStream comes less than a year after its paid about $214 million for Cambridge Technology Partners, a Cambridge, Mass., systems integrator and IT consultant. Messman, Novell's current chief, came over from CATP.

Shares of NOVL rose 0.14, or 4 percent, to 3.39 at midday. SSSW soared 3.765, or 73 percent, to 8.9.

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